Fitch Affirms Hotel Mortgage Trust

21 August 2003

CHICAGO—(BUSINESS WIRE)—Aug. 20, 2003—Fitch Ratings affirms Nomura Hotel First Mortgage Trust, series 1993-A, $51.2 million single class, commercial mortgage pass-through certificates at `AA+`. The affirmation relies heavily on the structural features of the transaction, which include a 22-year amortization schedule, additional principal payments to begin in November 2003, and a $10.5 million guaranty.
Fitch`s stressed debt service coverage ratio (DSCR), based on audited fiscal year-ended 2002 statements, calculated using a 11.33% refinance constant (the current loan balance), and adjusted for capital expenditures and reserves, was 2.51 times (x), compared to 2.60x at fiscal year-end 2001. While the overall performance of the properties has declined significantly over the past few years, the 22-year amortization schedule has kept the transaction above issuance levels. Additionally, beginning with the November 2003 payment, additional principal of up to $1.485 million per quarter is expected to be paid on the loan.
The certificates are secured by a pool of nine fixed-rate mortgage loans on Embassy Suites hotels located throughout the United States. The hotels are located in Colorado (2), Texas (2), Washington (2), Michigan, Ohio, and Oregon. All hotels have been inspected within the last two years without any significant signs of deferred maintenance noted. The Borrower continues to renovate and update the properties to remain competitive in their respective markets.
Fitch will continue to monitor this transaction closely.